The hedge fund attack that wasn’t

CNBC and BAE Systems are abruptly retracting a June report describing a previously undisclosed “audacious and sophisticated attack” against a large hedge fund that supposedly crippled the fund’s high-speed trading and stole data.

Paul Henninger, a global product director for BAE Systems Applied Intelligence, disclosed the attack in an exclusive interview with cable network station CNBC in June. BAE now acknowledges the error, telling CNBC that Henninger described an “anonymized illustrative scenario” rather than actual events during his appearance.

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“Although the example was a plausible scenario, we believe that it does not relate to a specific company client,” BAE Systems said in an email statement. “We sincerely apologise for this inaccuracy. We are taking the necessary action to ensure this type of error does not occur again.”

CNBC ran a new story earlier Wednesday afternoon with a statement from BAE Systems spokeswoman Natasha Davies. Henninger’s tale of hackers slowing down a hedge fund’s trading pace and stealing data “was inaccurately presented as a client case study rather than as an illustrative example,” she told the station.

In the original report, CNBC reporter Eamon Javers said: “Here’s what we know, as of today: The hackers penetrated the firm. They were able to slow the firm’s high-speed trading strategy. … What we don’t know here is the name of the hedge fund involved. BAE says they’re going to protect the identity of their client.”

Henninger then told CNBC that the supposed attack was “the first time we’d seen someone design a piece of software that was explicitly designed to attack” an order-entry trading system.

BAE did not return separate requests for comment Wednesday. BAE also told CNBC that Henninger is “taking some time away from the business.”